Puzzle Financial Advice

Professor Shiller’s Crash Confidence Index measures responses from both institutional and individual investors in the US to the question: “What do you think is the probability of a catastrophic stock market crash in the US, like that of October 28, 1929 or October 19, 1987, in the next six months, including the case that a crash occurred in the other countries and spreads to the US?”. The index for individual investors currently stands at 24.49, the lowest level since Februar

Key points: In "normal" times, mortgage funds with conservative LVRs can be good stable fixed interest investments earning a better return than cash. And we did recommend some mortage funds up until somewhere like 2003 or 2004 or thereabouts. But we ceased recommending them then because we could see the rising private debt bubble in Australia .... which as you know, accept for Japan post 1989, has always been a pre-cursor to economic depression in countries like Australia and

The Austrian School of Economics argues that excess money supply causes inflation. https://en.wikipedia.org/wiki/Inflation#Austrian_view "The Austrian School stresses that inflation is not uniform over all assets, goods, and services. Inflation depends on differences in markets and on where newly created money and credit enter the economy" https://en.wikipedia.org/wiki/Austrian_School Usually, it creates consumer price inflation and aseet price inflation in due course. Bu

US fund manager Jeff Gundlach says “This is almost like a suicide mission,” he said. “At some point, with debt and its service cost increasing, there will be a collision. There could be a solvency problem.” https://www.advisorperspectives.com/articles/2018/06/13/gundlach-federal-debt-is-on-a-suicide-mission?%3Ftextlink= The following chart of US Federal Debt comes from Jeff's presentation https://www.advisorperspectives.com/pdfs/2018-Slides/6-12-18_TR_Webcast-FINAL.pdf

Key quotes: "Are brewing exchange-rate and debt crises in Argentina and Turkey localized events without broader implications? Or are they early warning signs of deeper fragilities in bloated global debt markets that are being exposed as the US Federal Reserve continues to normalize interest rates?" With an economy ten times the size of Greece, a default in Italy would blow up the eurozone. It is notable how much the IMF, the world’s debt and financial crisis watchdog, has bee

John Hewson says ( http://www.abc.net.au/news/programs/the-business/2018-06-08/john-hewson-speaks-to-the-business/9851744 ): "Complacent investors are missing the warning signs of what could be the next global financial crisis according to former federal Liberal leader John Hewson. He says there is a real risk of a global trade war akin to what happened at the height of the great depression and its incumbent upon politicians and regulators to fess up and talk straight about

A feature of global GDP share increasingly shifting to the "emerging world", the same is also happening with Global trade. This can be seen in the chart below. https://www.statista.com/chart/8957/international-merchandise-trade-by-type-of-trading-partner/ https://www.martincurrie.com/institutional/uk/insights/how-emerging-markets-are-transforming-global-trade https://www.wto.org/english/res_e/statis_e/wts2016_e/wts2016_e.pdf https://www.wto.org/english/res_e/statis_e/wts201